STAND. COM. REP. NO. 36-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 1970
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii


Sir:

     Your Committees on Economic Development and Business
Concerns and Consumer Protection and Commerce, to which was
referred H.B. No. 1970 entitled: 

     "A BILL FOR AN ACT RELATING TO PREPAID TELEPHONE CALLING
     SERVICE,"

beg leave to report as follows:

     The purpose of this bill is to specify that the sale of
prepaid telephone calling services is subject to the general
excise tax (GET) at the point of sale.

     GTE Hawaiian Telephone and AT&T testified in support of this
bill, with amendments.  The Department of Taxation commented on
this bill.

     Your Committees have amended this bill by:

     (1)  Clarifying that all prepaid telephone calling services
          are subject to the GET rather than the public service
          company tax; and

     (2)  Changing the effective date of the bill to September 1,
          2000.


 
 
 
 
 
                                 STAND. COM. REP. NO. 36-00
                                 Page 2

 
     As affirmed by the records of votes of the members of your
Committees on Economic Development and Business Concerns and
Consumer Protection and Commerce that are attached to this
report, your Committees are in accord with the intent and purpose
of H.B. No. 1970, as amended herein, and recommend that it pass
Second Reading in the form attached hereto as H.B. No. 1970, H.D.
1, and be referred to the Committee on Finance.


                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Economic
                                   Development and Business
                                   Concerns and Consumer
                                   Protection and Commerce,



____________________________       ____________________________
RON MENOR, Chair                   ROBERT N. HERKES, Chair